Last few years have seen multiple forces change the global business landscape. Through the noughties and thereafter, the common refrain has revolved around the shifting economic locus from the developed world towards the emerging pack. And because change confuses, constricts and cripples, it is important to understand the nature and extent of its impact. So when one of the world's best-known business advisors, Ram Charan, decided to study the flow of jobs, wealth and power to the newer worlds, it was bound to be a path-breaking deep dive into the once-in-centuries phenomenon. In his latest book, Global Tilt, Ram Charan studies the North to South (countries below 31st parallel) power shift, what it means for countries and companies, and how to deal successfully with the great power shift. In an interview with CD, Ram Charan discusses the Global Tilt, the forces shaping it and how to win in a tilted world. Edited excerpts:

What is 'Global Tilt' all about?

The world has changed dramatically since the Chinese began to create economic growth in China. There has been a permanent shift in terms of jobs, economic growth and political power. All companies in the world must come to terms with these shifts - which I call as 'the tilt'. They must understand what does this tilt mean, how to thrive in it and how to deal with it. It is more demanding on companies in developed countries like America, Japan, Europe, who need to learn to deliver their shareholder value in times of permanent economic power shift.

So what are the drivers for 'the tilt' phenomenon?

I see five drivers. The first one is the rise of China, which has largely been built by western countries. Western companies went to China for labour arbitrage and used the low-cost labour force to export out of China to more developed nations. The second major shift is the composition of the GDP, which is changing because of multiple factors, which include digitization, mobility, sensors, cloud, mathematics and software. That is a different kind of a tilt. Third is that the Chinese, in particular, have amassed a large amount of foreign reserves, close to 3 trillion dollars, that gives them substantial economic power. However, the opportunity for growth is in the south, which is seeing a population growth and rapid emergence of the middle-class. It is interesting to see that China has now managed all the resources they need; they do not have to beg from the western world anymore and are not dependent on Japan any longer. Today, the Chinese can get the best consultants and the best talent. They still need a few things from America, particularly the market, technology and some managerial know-how.

Another important development has been the financial crisis that accelerated the tilt because it undermined Northern economies by vastly increasing government debt, raising unemployment, stifling consumption and shrinking investment.

Enter The Draqgon

Going forward, innovations will come from all around the world. We will witness the invention of a type and scale never before seen. Major innovation in the latter part of the 20th century was for most part, institutionalized: highly concentrated in companies such as Intel, Motorola, Bell Labs etc. But then, American tech entrepreneurs, like Steve Jobs, Marc Andreesen, Jeff Bezos, Mark Zuckerberg, have been changing the world. The new innovations will come due to real-time openness and democratization of knowledge and availability of startup funds in a digitized world.

What does this tilt mean for India and what do Indian CEOs have to watch out for?

First, in India, entrepreneurship is alive. Second, we have state governments, like Gujarat, that are changing the game. I saw big ads from the Uttar Pradesh government too. States can do a lot. If they begin to look at the globe as a whole and then say how they can get a fair share in the global GDP, India will have a very good future. Many things do not require a parliamentary pulling as we have seen in the case of Gujarat and Tamil Nadu. The states can achieve a lot without having to worry about anything. At the same time, we need to get more FDI; FDI brings talent, technology and management expertise, but we need to think with a global mindset.